A Short-Term Reprieve: The Data

A weaker dollar, falling interest rates, lower inflation and oil prices are offering a welcome, albeit temporary relief to emerging markets. These conditions are expected to prevail in the near term and should lead to an ebbing of the “flight-to-safety” of US assets. The favorable trends discussed above might be fleeting and we need more data on inflation and economic performance to get a better handle on the global economic outlook. However, this short-term reprieve should be used by policy-makers to make progress on the global financial architecture.